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... Quality was no longer seen as an additional cost to manufacturing, more an integral part of the production process. ... respected more for business acumen and decision making …helping to lend order and structure to making the right business decisions
The most significant change in management accounting systems has been the introduction in JIT Purchasing. Cycle time, the sum of processing time, move time, wait time and inspection time, has had the most considerable influence on JIT purchasing. It should be the companys goal to eliminate all areas of manufacturing that do not add value to the end product.
Exhibit 1
Warehouse
Exhibit 1 shows a traditional purchasing environment compared to JIT purchasing. In the JIT environment cycle time has been dramatically reduced, move time and warehouse time have both been eliminated without altering the products service potential to the customer. ...
Cost allocation has also changed under JIT, it can influence an accounting system in one of two ways
(i) It increases the direct traceability of costs
(ii) It changes the cost pools that are used to accumulate costs
In a traditional purchasing environment, warehouse costs and other manufacturing costs would have been incurred in a multipurpose environment. ... In a JIT environment the manufacturing costs would be allocated to a single retail or manufacturing area, therefore a more accurate costing can be allocated to a product.
Approximate Word count = 1115
Approximate Pages = 4.5
(250 words per page double spaced)
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